Crown Acquisitions has formed a joint venture with Wynn Resorts to own and operate the luxury retail space at Wynn Las Vegas.
The Manhattan-based Crown, which has investments in the retail condominiums at 666 Fifth Avenue and the St. Regis Hotel, will pay $500 million for a 49.9 percent interest in a portion of Wynn Las Vegas’ owned and leased retail.
The deal includes about 90,000 square feet of retail at Wynn and Encore Esplanades, plus a 74,000-square-foot expansion, Wynn Plaza, under construction at Wynn Las Vegas. Wynn Plaza will accommodate just under 30 stores on two levels, with traditional luxury retailers on the main level and Southern California-inspired brands on the second. It’s scheduled for completion in late 2017 or early 2018, said Haim Chera, principal of Crown Acquisitions.
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“With Crown, in addition to retaining control of our tenant roster, we’ve found ways of making more money with the available store space,” said Wynn Resorts chief executive officer Steve Wynn. “More than the agreement’s financial aspects is the fact that the Crown team is far more experienced in the nuances of landlord-tenant relationships due to their wide experience.”
Wynn Resorts will act as the managing member, retaining 50.1 percent of ownership of the new retail joint venture.
Wynn Las Vegas on Monday crowned itself the “highest-grossing collection of luxury shops in America with a sales per square foot record of $4,145.” Retailers at Wynn Las Vegas and Encore Esplanades include Chanel, Louis Vuitton, Dior, Hermès, Rolex, Cartier, Alexander McQueen, Givenchy and Chopard.
By contrast, Bal Harbour Shops in Bal Harbour, Fla., which ranked first in Green Street Advisors’ 2016 list of highest-performing U.S. malls, did $3,185 in sales per square foot, while number four, the Forum Shops at Caesar’s Palace in Las Vegas, rang up $1,615.
“We formed an alliance to take an already incredible retail asset and make it better,” said Chera. “We never thought we’d do anything in Las Vegas. We’re used to Fifth Avenue and New Bond Street in London. When we looked at the Wynn Las Vegas, it’s really [a more contained] Fifth Avenue.”
“With Crown, in addition to retaining control of our tenant roster, we’ve found ways of making more money with the available store space,” said Wynn Resorts chief executive officer Steve Wynn. “More than the agreement’s financial aspects, is the fact that the Crown team is far more experienced in the nuances of landlord-tenant relationships due to their wide experience.”
Crown’s involvement will extend to the $1.5 billion Paradise Park — billed as Wynn’s biggest project in Las Vegas in more than a decade. Plans call for replacing the 18-hole Wynn and Encore golf course with a lagoon, beach and 1,500-room hotel tower.
Crown is also interested in the retail component of Wynn Resorts’ properties in Macau, despite a decline in tourists, government crackdowns on luxury gift-giving and protests. “Macau has one of the great futures in luxury even though it’s softened a bit lately,” Chera said.
“The retail at Wynn has been fully leased for at least 10 years,” Chera said. “Some major luxury brands haven’t been able to get in. There was no room for them.”
Chera said that Richard Johnson, who until recently was head of real estate for Kering Americas, will work with Wynn tenants as director of retail leasing.
“Wynn Las Vegas gets 10 million visitors a year,” said Chera. “About 60 percent enter through the main gate. Steve put all the additional retail at the front door — that’s six million people.”